The courtship is over, and it looks like it’s time for the honeymoon to begin. Just over two months after announcing plans to purchase Beats Electronics and all of its spoils to the tune of $3 billion, Apple welcomed the hip headphone brand into the fold today with an official post on its homepage. The news comes after an endorsement from the European Union, which found no competition issues with melding the two brands.
“Today we are excited to officially welcome Beats Music and Beats Electronics to the Apple family,” the post reads. “Music has always held a special place in our hearts, and we’re thrilled to join forces with a group of people who love it as much as we do.”
“Today we are excited to officially welcome Beats Music and Beats Electronics to the Apple family”
“Beats cofounders Jimmy Iovine and Dr. Dre have created beautiful products that have helped millions of people deepen their connection to music. We’re delighted to be working with the team to elevate that experience even further. And we can’t wait to hear what’s next.”
Sporting the iconic Beats logo in red, which Apple has reportedly decided to keep on all of the extremely well branded Beats gear, the message is succinct, but telling.
A lot of investors and analysts were somewhat puzzled when news of Apple’s proposed acquisition hit the Web, for several reasons. The purchase price of $2.6 billion in cash, and $400 million in assets seemed high, especially since Beats was valued much lower, at around $1 billion, in September of 2013.
Additionally, Beats’ splashy headphone and portable speaker line seemed a strained fit for Apple’s more subtle design style. And then there’s Beats Music. While the highly visible service adds a nice lift to Apple’s iTunes services, it has been struggling to amass subscribers, tallied at around 111,000 by the New York Post when the acquisition was first announced in May – a slim figure when compared to Spotify’s mighty 10 million and counting.
However, as the message coyly implies, locking down Beats is about more than just the assets. Apple is no doubt “thrilled to join forces with a group of people who love music,” specifically Jimmy Iovine, who is chair of three music labels, a starmaker and producer, and also happens to be close personal friends with Apple CEO Tim Cook. Bringing star hip-hop artist and producer Dr. Dre “into the family” doesn’t hurt Apple’s cred either. And the rest of the creative staff at Beats has shown an impressive proclivity for creating products people can’t wait to snatch up.
While the champagne may be flowing from Cupertino to Culver City (Beats’ hometown), the billion dollar buyout is not all roses for the Beats staff. A reported 200 or more Beats employees (around 30 percent), will not be invited to the new digs. The employees are thought to be from mostly overlapping positions in human resources, and finance, while most creative employees will apparently be invited to transition to positions with Apple.
Love Beats, or hate it, the buyout marks a new era for Apple, music streaming services, and the headphone market as a whole. The company that helped spawn today’s current headphone craze is becoming a part of one of the most powerful corporations on the planet. And just like Apple, we’re intrigued to see (and hear) what’s next.